• Economics

Real Estate Sector to Rebound by 2026, Experts Say

• By Thun Senghong
• March 12, 2024 7:10 PM

PHNOM PENH – Experts have forecast that Cambodia’s real estate sector will rebound between 2026-2027 due to a robust economy. 

The beginning of 2024 marks Cambodia’s fourth year of continued stagnation of its real estate sector, which slowed down due to the COVID-19 pandemic and struggles to regain its former dynamism due to the lack of foreign investors, especially from China. 

Sorn Siep, the president of the Cambodian Valuers and Estate Agents Association (CVEA) said the real estate sector will return to its former standards and will start to increase in the next three to four years.  

During the Economic and Real Estate Situation in 2024 Forum on March 11, organized by the Club of Cambodian Journalists, he said the fluctuation of the real estate sector varies depending on the country’s growth. 

“When the economy goes slow, the real estate sector necessarily follows the same trend in the next six months to one year. Once the country experiences economic recovery, the real estate sector also rises,” Sorn Siep said. 

Ky Sereyvath, a researcher in economics at the Royal Academy of Cambodia said the real estate current stagnation is also the result of an unusual peak five years ago, when many investors turned their back on the manufacturing sector to invest massively in construction. 

“Recalling 2018-2019, numerous projects of commercial buildings, condos, boreys [gated communities] were spread throughout the country, particularly in Sihanoukville, which gave a strong boost to the real estate sector [nationwide],” Sereyvath said. 

“After COVID-19 came onto the scene, many project owners suspended their construction. According to a CBRE report, condo and land prices experienced a significant drop by 30 percent since 2019.”

He said after the government announced a ban on the thriving online gambling industry in Sihanoukville, many project owners suspended their construction.

The pandemic has only reinforced this trend: As citizens started to be mindful of their savings and expenditures, they could no longer afford to buy and sell real estate.  

Sorn Siep said the housing sector, including boreys, is already rising, with a 50 percent increase in the price per square meter in 2023 compared to 2022. On the contrary, the prices of condos only increased by 0.2 percent over the same period. 

“Taking a glance at the commercial buildings, including the supply of office buildings and hotels, there was a significant rise. In contrast, supermarkets declined due to the rise in online sales. While there was a rise in the industrial sector, the real estate in the agricultural sector remained unchanged,” Sorn Siep said.  

According to the International Monetary Fund (IMF), Cambodia’s growth will reach 6.1 percent in 2024, up from 5.3 percent in 2023.

 

Originally written in Khmer for ThmeyThmey, this story was translated by Rin Ousa for Cambodianess.